Bucharest, Romania, December 15, 2022—To help channel funding to smaller businesses, including women-owned small and medium enterprises (WSMEs), IFC is providing €20 million to Patria Bank, a bank listed on the Bucharest Stock Exchange, as part of its larger efforts to spur economic growth and support small-scale entrepreneurs in Romania.
Under this new agreement, the bank—serving micro, small, and medium enterprises (MSMEs), as well as agro and retail customers—will use the proceeds of the IFC loan to ramp up lending to MSMEs, helping them unlock their growth potential. Around 50 percent of the funding will be earmarked for WSMEs, targeting rural areas of Romania.
Though the situation has improved over the last decade, access to finance is still a major challenge for MSMEs in Romania, with a finance gap that is more than twice the current MSME loan volume. Most small firms, especially those owned and led by women, are marked by low labor productivity and growth, which can often be attributed to limited access to finance. Moreover, MSMEs in the country have been severely affected by the lockdowns, increased uncertainty, and an economic slowdown in the wake of the COVID-19 pandemic.
"One of the strategic priorities of Patria Bank Group is to support the entrepreneurial environment in Romania. We focus all our efforts to provide development opportunities for the businesses of our customers and sustainable tools to help them face the challenges of the macro-economic environment," said Burak Yildiran, CEO of Patria Bank. "The strategic partnership with IFC helps our vision to support the entrepreneurs from Romania and women entrepreneurs, in particular. In the next five years our ambition is to double the volume of loans granted to this segment and will focus on supporting female entrepreneurship by facilitating them access to financing sources."
IFC's current investment will help reinforce Patria Bank's ability to reach underserved segments of the Romanian population. The loan will not only help close the financing gap but also support job creation and a more favorable private sector, essential for economic growth, especially post-COVID.
"With the recovery from the COVID-19 crisis being cut short by the war in Ukraine, new risks but also new opportunitites exist for MSMEs in Romania who will need continued access to capital, as they adjust their business models to the new context," said Ary Naïm, IFC's Regional Manager for Central and Southeast Europe. "At a time like this, we are confident that our partnership with Patria Bank will help strengthen the local entrepreneurship ecosystem in Romania, boosting economic resilience."
IFC has supported private sector development in Romania for over 30 years, with a committed exposure of $1,411 million as of December 2022.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
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About Patria Group
Patria Bank is a Romanian bank dedicated to increasing the degree of banking in Romania and supporting entrepreneurs and local businesses. Listed on the Bucharest Stock Exchange, Patria Bank has a national physical presence and offers basic banking products and services 100% online to all Romanians, wherever they are. The majority shareholder of Patria Bank Group is the Emerging Europe Accession Fund (EEAF), a private equity fund whose main investors are the EBRD (European Bank for Reconstruction and Development), the EIF (European Investment Fund, part of the European Bank Group for Investments), DEG (Development Bank, part of the KFW banking group) and BSTDB (Development Bank of the Black Sea Region). Together with Patria Bank S.A., the Patria Group also includes: Patria Credit IFN, an institution with expertise and experience in microfinance, European funds and financial products dedicated to the agro segment and Patria Asset Management, a company specialized in investment management. For more information, visit www.patriabank.ro.
